How will divorce affect your retirement plans?

by | May 20, 2021 | Complex Property Division

One bonus of divorce is that you will be free to live where you wish. If you always want to buy a Winnebago and travel the country, or move to be nearer your adult kids, you are free to do so — as long as you can afford it.

To be free to spend your retirement as you choose, it is crucial to get the right financial settlement when you divorce. The closer you are to retirement age, the more critical this becomes, as you have less time to recover your savings.

What are some important things to consider when divorcing?

Pension plans can be key to a comfortable retirement. If you stay married, you will get a share of your partner’s pension plan, so it would be a shame to lose that at the last moment. Consider seeking a Qualified Domestic Relations Order (QDRO). It splits the pension plan at the time of your divorce to make sure you do not lose your share. You are only entitled to a percentage of contributions made during your married years, not those made before marriage.

Divorce might also affect your entitlement to health insurance if you receive cover via your spouse’s plan. The cost of taking out a personal policy may be higher than you think, so it is crucial to make allowances for this when dividing your marital assets.

Remember that there are many ways to divide assets in a divorce. Rather than focusing on individual items, you need to look at the total of what you have and your goals for the future. When asset division gets complicated, it’s generally wisest to work with an experienced advocate on a strategy for your split. 

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*The above is not meant to be legal advice, and every case is different. Feel free to reach out to us at Hoover Krepelka, LLP, if you have any questions. Information contained in this content and website should not be relied on as legal advice. You should consult an attorney for advice on your specific situation. 

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